Assets and Liabilities Held for Sale

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment Assets Held-for-sale Disclosure [Abstract]

Assets and Liabilities Held for Sale

As a result of its Chapter 11 filing in March 2021 and the Company’s consequent lack of authority to sell certain assets without the approval of the Bankruptcy Court, the Company reclassified four off-lease aircraft, comprised of three regional jet aircraft and one turboprop aircraft, from held for sale to held for lease. The Company has two turboprop aircraft that are being sold in parts and are held for sale in the ordinary course of its business.

(a) ACY E-175 LLC

In March 2021, the Company sold its 100% membership interest in ACY E-175 LLC, which owned three Embraer E-175 aircraft on lease to a U.S. regional airline. At December 31, 2020, the Company classified the assets and liabilities of ACY E-175 LLC as held for sale and recorded an impairment loss of $2,649,800. The table below sets for the assets and liabilities that were classified as held for sale at December 31, 2020:

Cash and cash equivalents	$	345,900
Restricted cash		2,346,300
Aircraft		24,550,000
Notes payable and accrued interest, net of unamortized debt issuance costs of $313,400		13,836,900
Derivative liability		767,900

The pre-tax loss of ACY E-175 LLC was $1,976,200 and $2,950,300 for the year ended December 31, 2020 and quarter ended March 31, 2021, respectively.

(b) Part-out Assets

The Company owns two aircraft being sold in parts (“Part-out Assets”). During the first quarter of 2021, the Company received $34,400 in cash and accrued $44,200 in receivables related to the Part-out Assets. These amounts were accounted for as follows: $34,400 reduced accounts receivable for parts sales accrued in the fourth quarter of 2020; $38,900 reduced the carrying value of the parts; and $5,300 was recorded as gains in excess of the carrying value of the parts. During the first quarter of 2020, the Company received $175,500 in cash and accrued $77,300 in receivables for parts sales. These amounts were accounted for as follows: $117,400 reduced accounts receivable for parts sales accrued in the fourth quarter of 2019; $117,800 reduced the carrying value of the parts; and $17,600 was recorded as gains in excess of the carrying value of the parts.

In May 2021, the Company agreed to sell most of the Part-out Assets for $290,000, and recorded an impairment loss of $1,940,400 in the first quarter of 2021.